Brendan Burgess
Founder
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- 52,184
The Central Bank needs to assess this very carefully. They have serious creditability issues at present. A complete climb down will cause them a lot of damage. I think an insurance scheme will be just as damaging.
To get the borrower to insure the banks risk will be just as reckless.
Don’t bet your house on Central Bank mortgage rules going ahead
Opinion: regulator cannot simply ignore Government views on 20% deposit rule
....A fall in house prices wouldn’t be helpful either, given the implications of negative equity and mortgage arrears.
House buying will become the preserve of the wealthy and those on high incomes if restrictions on mortgages proposed by the Central Bank are introduced, the Department of Finance said in a submission.
No one dares mention getting building costs down, lowering the cost of housing to free up money for spending in other areas of the economy (or even freeing up jobs by allowing couples to keep 1 person at home with the kids).
It's absolutely depressing to live in this country and see how we just go round in a never ending circle, no matter how many times we screw things up...rinse and repeat
There is no direct correlation between the CB proposed guidelines and building costs. In fact there is no indication by any interested party that building costs are currently inflated.
There is no direct correlation between the CB proposed guidelines and building costs. In fact there is no indication by any interested party that building costs are currently inflated.
Exactly. This measure has absolutely nothing to do with the (Dublin) supply issue. That has to be solved by separate measures (and most likely with no quick fix).There seems to be an irrational amount of effort being put into sorting out the deposit and LTV formula when the real issue is supply in areas like Dublin.
There is no direct correlation between the CB proposed guidelines and building costs.
As the rental market becomes "unworkable" for weaker earners, many will make the decision to relocate. This will result in a tighter labour market in Dublin. In my view this will push up wages and salaries in the Dublin area and this is what is needed.
I don't think there is any expectation that prices will fall in Dublin - on the basis of one single measure. You would hope that this is seen as one measure that can be implemented contributing towards an overall policy relevant to the property market, housing and the aspect of banking relevant to this area.I disagree fundamentally that reduction in credit will cause prices to fall.
Patrick Honohan was appointed Governor on 26th Sept 2009 and since then he has been dealing with more urgent issues such as bank recapitalisation.
Mortgage restrictions is the sort of important but not urgent issue.
I disagree fundamentally that reduction in credit will cause prices to fall. I believe that a reduction in credit will cause houses to stabalise (in Dublin)
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Just a thought.Hi all and Happy New Year to all readers.
I have been following with interest the debate re the restrictions proposed by the Central Bank on lending in relation to mortgages and I find it incredulous the reaction from our lenders but should we be surprised.
Here is an idea that they will find hard to counter
'Central Bank' will allow 90 or even 95% mortgages provided same are arranged with a full term fixed rate attaching thereby meaning the loan can be stressed at the fixed rate chosen at the beginning of the mortgage. No argument can be put forward against this by the Banks other than the veiled one that exists at all times namely profit excesses for the lenders. There will be sufficient profit to be gained from a current fixed rate of 3.85% for 30 years (current rate in USA) I believe this is the basis under which Mr. Honohan should adopt his proposals to counter the resistance from Connected parties. Just my thoughts Padraic
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